PAUL? PAUL: THIS IS AFFECTING HUNDREDS, MAYBE THOUSANDS OF PEOPLE HERE IN WESTERN P.A IT INVOLVES A NEW YORK FIRM CALLED MY PAYROLL HR THAT HANDLES PAYROLL FOR HUNDREDS OF COMPANIES. MY PAYROLL HR SHUT DOWN SUDDENLY LAST WEEK, AND WHEN IT DID, THE MONEY THAT IT HAD DEPOSITED IN PEOPLE’S BANK ACCOUNTS DISAPPEARE >> I CHECKED MY BANK ACCOUNT AGAIN. THE MONEY WAS GONE. THEY TOOK IT BACK. PAUL: JUST HOURS AFTER CINDY FOREBACK’S PAY WAS DEPOSITED INTO HER BANK LAST WEEK, IT DISAPPEARED. CINDY IS ONE OF 130 EMPLOYEES AT LIKEN HOMECARE IN FOREST HILLS WHOSE PAYCHECKS VANISHED. >> PEOPLE CAN’T PAY THEIR RENT. THEY CAN’T FIVE FOOD FOR THEIR KIDS. PAUL: IT ALL HAPPENED AROUND THE SAME TIME SHE GOT AN EMAIL FROM THEIR PAYROLL COMPANY, MYPAYROLLHR, SAYING THEY WERE SHUTTING DOWN. >> I THOUGHT, WHAT? THIS CAN’T BE HAPPENING. PAUL: SHE CALLED THE COMPANY AND GOTTEN NO ANSWERS. SO COMPANY PRESIDENT BOB LIKEN HAD TO WRITE PAYROLL CHECKS THE OLD-FASHIONED WAY FOR EMPLOYEES DESPERATE TO BE PAID. >> A LOT OF PEOPLE LIVE PAYCHECK TO PAYCHECK AND THEY DIDN’T HAVE THE MONEY IN THEIR ACCOUNT TO COVER THE REVERSAL. THEY HAVE BEEN GETTING HIT WITH FEES LEFT AND RIGHT. PAUL ONE OF THEM WAS NICOLE FROM LATROBE. >> THAT WILL CREATE MORE LATE PAYMENTS, LATE FEES THAT MAY ACCRUE AND THAT WILL AFFECT YOUR CREDIT. PAUL: WE TRIED TO REACH MY PAYROLL HR BUT NO ONE RESPONDED. THE WEBSITE FOR THE PARENT COMPANY WAS SHUT DOWN. NEW YORK GOVERNOR ANDREW CUOMO OPENED AN INVESTIGATION, SAYING THE COMPANY’S RECKLESS ACTIONS LEFT EMPLOYEES WITH NEGATIVE BANK ACCOUNTS AND THE DESERVE ANSWERS. >> IT IS BATTLE AROUND. THESE PEOPLE NEED THEIR MONEY. PAUL CINDY AND NICOLE SAID THEY ASKED PNC TO REIMBURSE THEIR ACCOUNTS FOR THE MISSING PAYCHECKS, BUT SO FAR THE BANK REFUSED. A PNC SPOKESPERSON SAYS THE BANK REFUNDED OVERDRAFT AND OTHER

The businessman at the center of the collapse of MyPayrollHR has been charged with using fake companies to fraudulently obtain up to $70 million in loans and lines of credit. Michael Mann, the 49-year-old owner of the now-shuttered company based in Clifton Park, New York, appeared in U.S. District Court on Monday afternoon with his attorney Michael Koenig, a week after FBI agents searched his lakefront home in Edinburg. Mann, wearing a suit and carrying a briefcase, appeared reserved during his brief court appearance.He spoke only a few times, greeting U.S. Magistrate Judge Daniel J. Stewart with "good afternoon," and answering, "Yes, your honor," to a series of procedural questions.He was charged with bank fraud in a criminal complaint filed by an FBI agent that was unsealed during his appearance and subsequently released on $200,000 bond, secured by his home and two cars.Stewart ordered Mann to avoid interactions with law enforcement, submit to a DNA sample and stay in the Northern District of New York unless he receives prior approval to leave. Stewart also ordered Mann to surrender his passport, which Koenig said Mann had already done.The judge asked Mann whether he owned any guns. Mann said no.An affidavit that forms the bulk of the complaint against Mann states that he and his attorney visited the office of the U.S. Attorney for the Northern District on Sept. 10 and, under questioning, "stated that he wished to accept responsibility for his conduct, and confess to a fraudulent scheme that he had been running for years."According to the complaint, Mann began borrowing "large sums of money" around 2010.Mann insisted that MyPayrollHR was a legitimate company, but admitted to creating other companies "that had no purpose other than to be used in fraud," according to the complaint.Mann began representing to several banks that his fraudulent businesses "had certain receivables that they did not have," and used those receivables to obtain loans and lines of credit, the complaint said."He claimed that he committed the fraud in response to business and financial pressures, and that he used almost all of the fraudulently obtained funds to sustain certain businesses, and purchase and start new ones," the complaint said.As part of the conditions for his release, Stewart ordered Mann to not open lines of credit without prior approval.The demise of MyPayrollHR and its parent company, ValueWise Corp., in early September resulted in financial chaos for thousands of workers at hundreds of companies around the nation who found their direct deposits reversed — in some cases, more than once. Many found themselves with negative balances that left them scrambling to cover basic expenses.Several companies that did business with Mann have described themselves as victims of possible fraud.One was Pioneer Bank, which the federal complaint described as Mann's largest creditor. Mann said the payroll reversals were the result of his decision to route payroll funds for MyPayrollHR clients into a Pioneer account instead of an account at Cachet Financial Services, which moved funds into employee accounts for MyPayrollHR.Mann said he moved the funds "to temporarily reduce the amount of money he owed to Pioneer," the complaint said. Pioneer froze Mann's accounts, causing the deficiency in thousands of bank accounts nationwide.Pioneer Bank had previously revealed that it was the lead bank in a $36 million loan provided to Mann's company. The syndicate behind that loan also included Berkshire Bank and Chemung Canal Trust Co., which operates Capital Bank. Berkshire Bank and Pioneer Bank each provided $16 million, while Chemung Canal Trust says its exposure was $4.2 million. All three banks are expected to take losses from the loans that will hurt their quarterly profits, although the exact dollar amounts are not yet clear.Cachet Financial Services, MyPayrollHR's California-based payroll processor, has made similar claims, citing what it has described as the apparent rerouting of payments intended for workers. Cachet has, however, admitted that its initial attempt to claw back those funds contained coding errors that ended up causing the multiple withdrawals, and an industry trade group has said the company's tactics were not in compliance with industry standards.MyPayrollHR and Cachet are now facing class-action suits brought by affected workers. Wendy Slavkin, a lawyer for Cachet's parent company, FBG Holdings, told the Times Union earlier this month that somebody from MyPayrollHR tampered with the electronic money-transfer system, rerouting funds that were meant to pay employees into a separate account at Pioneer Bank controlled by Mann or MyPayrollHR.The National Automated Clearing House Association, the trade group that has criticized Cachet, said about 8,000 employees from 400 companies were affected by the reversals. Mann had not been seen or heard from since the fiasco became public Sept. 6.Koenig, Mann's lawyer, told the Times Union last week that his client had "proactively" contacted and was cooperating with federal authorities. "He has not vanished," Koenig said. "He is not an international fugitive. He is not in hiding."During an interview Monday, Koenig reiterated that Mann voluntarily met with the U.S. Attorney's Office and is cooperating with the investigation."I understand that there is a lot of public interest in this case, and a lot of questions," Koenig said. "But out of respect for the integrity of the investigation, Michael will not be making any public statements or answering any questions other than those asked by investigators."Staff writer Larry Rulison contributed.

ALBANY, N.Y. —

The businessman at the center of the collapse of MyPayrollHR has been charged with using fake companies to fraudulently obtain up to $70 million in loans and lines of credit.

Mann, wearing a suit and carrying a briefcase, appeared reserved during his brief court appearance.

He spoke only a few times, greeting U.S. Magistrate Judge Daniel J. Stewart with "good afternoon," and answering, "Yes, your honor," to a series of procedural questions.

He was charged with bank fraud in a criminal complaint filed by an FBI agent that was unsealed during his appearance and subsequently released on $200,000 bond, secured by his home and two cars.

Stewart ordered Mann to avoid interactions with law enforcement, submit to a DNA sample and stay in the Northern District of New York unless he receives prior approval to leave. Stewart also ordered Mann to surrender his passport, which Koenig said Mann had already done.

The judge asked Mann whether he owned any guns. Mann said no.

An affidavit that forms the bulk of the complaint against Mann states that he and his attorney visited the office of the U.S. Attorney for the Northern District on Sept. 10 and, under questioning, "stated that he wished to accept responsibility for his conduct, and confess to a fraudulent scheme that he had been running for years."

According to the complaint, Mann began borrowing "large sums of money" around 2010.

Mann insisted that MyPayrollHR was a legitimate company, but admitted to creating other companies "that had no purpose other than to be used in fraud," according to the complaint.

Mann began representing to several banks that his fraudulent businesses "had certain receivables that they did not have," and used those receivables to obtain loans and lines of credit, the complaint said.

"He claimed that he committed the fraud in response to business and financial pressures, and that he used almost all of the fraudulently obtained funds to sustain certain businesses, and purchase and start new ones," the complaint said.

As part of the conditions for his release, Stewart ordered Mann to not open lines of credit without prior approval.

The demise of MyPayrollHR and its parent company, ValueWise Corp., in early September resulted in financial chaos for thousands of workers at hundreds of companies around the nation who found their direct deposits reversed — in some cases, more than once. Many found themselves with negative balances that left them scrambling to cover basic expenses.

Several companies that did business with Mann have described themselves as victims of possible fraud.

One was Pioneer Bank, which the federal complaint described as Mann's largest creditor. Mann said the payroll reversals were the result of his decision to route payroll funds for MyPayrollHR clients into a Pioneer account instead of an account at Cachet Financial Services, which moved funds into employee accounts for MyPayrollHR.

Mann said he moved the funds "to temporarily reduce the amount of money he owed to Pioneer," the complaint said. Pioneer froze Mann's accounts, causing the deficiency in thousands of bank accounts nationwide.

Pioneer Bank had previously revealed that it was the lead bank in a $36 million loan provided to Mann's company. The syndicate behind that loan also included Berkshire Bank and Chemung Canal Trust Co., which operates Capital Bank. Berkshire Bank and Pioneer Bank each provided $16 million, while Chemung Canal Trust says its exposure was $4.2 million. All three banks are expected to take losses from the loans that will hurt their quarterly profits, although the exact dollar amounts are not yet clear.

Cachet Financial Services, MyPayrollHR's California-based payroll processor, has made similar claims, citing what it has described as the apparent rerouting of payments intended for workers. Cachet has, however, admitted that its initial attempt to claw back those funds contained coding errors that ended up causing the multiple withdrawals, and an industry trade group has said the company's tactics were not in compliance with industry standards.

MyPayrollHR and Cachet are now facing class-action suits brought by affected workers.

Wendy Slavkin, a lawyer for Cachet's parent company, FBG Holdings, told the Times Union earlier this month that somebody from MyPayrollHR tampered with the electronic money-transfer system, rerouting funds that were meant to pay employees into a separate account at Pioneer Bank controlled by Mann or MyPayrollHR.

The National Automated Clearing House Association, the trade group that has criticized Cachet, said about 8,000 employees from 400 companies were affected by the reversals.

Mann had not been seen or heard from since the fiasco became public Sept. 6.

Koenig, Mann's lawyer, told the Times Union last week that his client had "proactively" contacted and was cooperating with federal authorities.

"He has not vanished," Koenig said. "He is not an international fugitive. He is not in hiding."

During an interview Monday, Koenig reiterated that Mann voluntarily met with the U.S. Attorney's Office and is cooperating with the investigation.

"I understand that there is a lot of public interest in this case, and a lot of questions," Koenig said. "But out of respect for the integrity of the investigation, Michael [Mann] will not be making any public statements or answering any questions other than those asked by investigators."